Converge ICT Solutions Inc. said Monday it reduced the maximum offer price for its initial public offering to P19 per share, down 21 percent from the previously indicated price of P24.
Converge ICT may raise up to P32.87 billion in proceeds based on the new indicative maximum offer price. This would still become the country’s largest maiden share offering.
The latest prospectus uploaded on the company’s website showed that the IPO attracted several foreign funds as cornerstone investors.
Among them are Canadian pension fund OMERS Administration Corp., US-based fund Thornburg Investment Management Inc., Genesis Investment Management LLP, Ghisallo Master Fund LP, Macquarie Funds Management Hong Kong Limited, Magna New Frontiers Fund and Segantii Asia-Pacific Equity Multi-Strategy Fund.
Converge ICT said these cornerstone investors would acquire about 38.6 percent of the total offer shares, including over-allotment shares.
The final price will be announced on Oct. 9, while the offer period will be from Oct. 13 to 19.
Converge ICT will offer up to 1.5 billion common shares with an over-allotment option for another 225.8 million shares.
Morgan Stanley and UBS AG are the global coordinators, while BPI Capital Corp. and BDO Capital and Investments Corp. are the joint local underwriters.
Proceeds from the IPO will be used to accelerate the company’s nationwide fiber network.
Converge ICT, which started as a small cable television operator in Pampanga, is one the fastest growing fiber internet and other digital consumer-centric service providers in the country.
It provides fiber optic internet access to subscribers in Metro Manila and the provinces of Pampanga, Tarlac, Bulacan, Cavite, Batangas and Pangasinan. It plans to venture into the Visayas and Mindanao over the next couple of years.
By 2025, the company aims to reach 55 percent of the total households in the Philippines.
Converge ICT said that to achieve the target, it budgeted P30 billion in capital expenditures from the second half of 2020 to 2021.
The company had 732,000 residential subscribers as of end-June.
After the IPO, Converge ICT will have a public float of 23 percent, assuming that the over-allotment option would be fully exercised.
Converge ICT said in a separate statement it started a fresh round of workforce augmentation with the deployment of more fiber optic installers.
It said it doubled its fiber optic installer crew compared to the pre-pandemic headcount, and aimed to triple the number by year-end. The continued augmentation of its workforce is part of an expansion plan that began in 2019.
Customers waiting for their homes and businesses to be connected to the fast and reliable internet of Converge ICT will be the first to feel the positive effects of the increase in personnel, it said.
“The expansion is now at its halfway point. Initially, we encountered some delays due to the Luzon-wide quarantines, which limited the movement of personnel,” said Converge ICT founder and chief executive Dennis Anthony Uy.
Uy said that since the restrictions were lifted, Converge teams on the ground had gained momentum. “We saw the surge in demand and acted quickly, working around operational roadblocks and finding more ways to serve our customers,” he said.
The company has undergone transformational growth, renewing and establishing contracts with four partner outsourcing companies to meet the surge in demand. This resulted in the hiring and training of hundreds of 48-hour technical and non-technical support agents.
The recent partnership with multinational telecommunications firm Nokia Corp. will enable the connection of over 300,000 customers in Mindanao to Converge ICT’s national backbone over the next three years.
“We thank our customers for their patience and understanding. While there have been some roadblocks in the last months, our turnaround times have improved considerably,” said Uy. “The significant boost in fiber optic installers will bridge last mile connection challenges and connect more Filipino homes.”